Missed Fortune’s Doug Andrew’s Book for Free!

Friday, February 27th, 2009 1:15 am

I am forwarding this to any Doug Andrew fans out there. For the ones, who are not aware, Doug Andrew is a great personal finance guru who has inspired hundreds or thousands of people into saving for future. Here is link that was sent to me in the email today. Hope you take advantage of this free download below. Go to Missedfortune.com to learn about him.

-A

Dear Amit,

THE PROBLEM? The average Baby Boomer has less than $50,000 accumulated for retirement (which means many have less than that), primarily due to bad habits and having money invested in the wrong places where economic downturns can diminish their nest egg. The solution? Social Security isn’t the answer. Taking ownership is the answer. When it comes to planning for retirement in these tough economic times, it’s apparent that many Boomers are confused. They feel isolated. They feel powerless. Many fear that it’s too late to plan for a comfortable retirement. Many are concerned that they haven’t saved enough-that they may outlast their retirement resources. Many have seen their retirement accounts decrease in value by thirty percent or more during the last few years. Because of lower rates of return, many are concerned that their nest eggs are draining faster than they had anticipated. What’s more, many are worried that taxes, inflation, and the costs of health care will quickly deplete what they have set aside…VIEW eBOOK

Book Review: The Motley Fool’s Million Dollar Portfolio

Tuesday, February 10th, 2009 11:44 pm

[Motley Fool’s Million Dollar Portfolio – How to build and grow a panic-proof investment portfolio]

Probably one of the best books i ever read. I am a big fan of fool.com and the language these guys use is just so simple and easy to understand. The entire book was a pleasure to read without any dictionary in my pocket [Have you ever read The Intelligent Investor by Ben Graham? Good luck with that book.].I think i got more out of the fool book from the first few pages than more than half-book of Ben’s masterpiece.

I am comparing two books because Million Dollar Portfolio is probably the only book i have seen come close to what Ben was trying to say [He just couldnt say it]. There were some similar concepts of What to look for in a company, How to identify which ones are a dud and which ones are not, how to take factors like P/E ratio, Dividend Yield, Company’s valuation into account before determining if its a buy; only in a much better explained way. Of course, the book is promoting its newsletters throughout the book but that doesnt stop them from sharing the concepts with appropriate examples that are just so inspiring. The book is full of very understandable scenarios that just only makes you feel more intelligent than a fool. What i like about the book is that they don’t mind revealing their source of information, which is very admirable. The innumerable references at the book clearly indicate that this book was a culmination of more than just amateur writers who wanted to let out the book. It only shows how Fool brothers and their team is absorbing knowledge from these literature and are disseminating them to us, in turn, experiencing the learning process by teaching – an ideal way to be successful [Look at the history of successful businessmen who were also great teachers].

Also this book is the one of the only ones that makes the distinction between growth vs value stocks a lesson for investors. The asset allocation indicating percentages is something you won’t see in any other books.

The Appendix of the book is more valuable than some books written on Mutual funds. The recommendations are very powerful and backed by their research, a rarely seen sight in this business.

I’d buy it and keep it for a better understanding of the concepts, if not for the stocks indicated in the book.

-A

Things for me to learn from the book:

1) Read Jason Zweig’s : Your Money and Your Brain.

2) Nassim Taleb’s : Fooled by Randomness

3) Gary Belsky: Why smart people make Big money mistakes- and how to correct them.

4) Read about Seth Klarman of investment firm Baupost Group.

5) One up On Wall street – Peter Lynch

6) Google company name + “Investor Relations” for knowing more about the company.

Akule’s Fund Part 3 : The worst is over.

Tuesday, February 10th, 2009 2:36 am

While Akule just turned 10 months last 4th, i thought i’d go over how he is doing financially. [His physical fitness is a topic for another entry].

Akule’s Portfolio in June 08 didn’t look that bad. I had just started investing towards his education fund. I was very confident of my stock picks for him and had divvy’ed the money up into four stocks : an upcoming bank with great dividend history [USB], a largest producer of natural gas [CHK] , A chemical sector stock [TRA] and a Kitchen appliance company ready to be the next Walmart [MIDD]. The portfolio was more of a research done by Jim Jubak into picking these stocks and they were living it upto the expectations so to speak.

Fast forward to November, when i published Akule’ Fund part two. A whole five months had passed and the stock positions had stayed in red all along. I decided to put some of the money into a stable position that wouldn’t fluctuate as much. I saw that hope of light in two biggies – Arcelor Mittal Steel and none other than Berkshire Hathaway. The portfolio was -37.44% then and i thought that is as far down, a stock could go. I was wrong, obviously, as up until last month [January 09] i would check sharebuilder once in a while and the positions had slipped to -49% recently. The sinking stocks brought to my attention that Akule’s fund is growing in terms of some liquid cash that could be put to good use. My contributions into his fund had become sizeable enough to be greedy for some more stocks. I decided to increase my investments into the stocks i had belived in from the very beginning. Following Jim Jubak made me realize that CHK can be left out for now and it was time to add something new to the portfolio that was available in cheap. I didn’t have to think far away into a sector. I thought of toys! .

On 3rd of Feb 09, Akule’s fund invested as shown below:

[$550 more invested on 3rd Feb 09]

The portfolio is now a little bit more invested into USB, TRA and MIDD : the stocks i had bought in June. I decided to add more money to Berkshire that turned out to be an excellent trade for a dirt cheap price. [BRKB was trading at ~ $2900 those days compared to $4400 around June and $3900 around December]. The newcomer in the portfolio was Mattel – the toymaker of the Barbie, Hot Wheels, Fisher-price fame. Yes I know about the fiasco last year on how their recall on toys etc that made big news. They have since then been reporting loss for the subsequent quarters. [Remember they weren’t to be blamed for toy recall]. I will wait until the end of this year to see how they do before giving up on them.

Surprisingly enough, [scary too!!], on 5th of Feb, when i checked my positions, the portfolio had jumped a whopping 29% towards positive. It stands at ~-20% as of today compared to -49% in December 08.

[-19% in Feb 09 from -49% around late December 08]

The contributions of $1323 so far is looking more like $1008 today but i am confident i made the right choice in these investments. Remember, all this money would have gone to things immaterial anyways [see my contributions]. If you noticed, the portfolio is small but fully into stocks. I am able to put all this money into stocks since we have around two decades before we this money will be taken out and that i will diversify even more as the contributions go up. Depending on your age and comfort level, i would be cautious in putting all my money into stocks. I also wanted to let the journal readers know that my own portfolio [i will share that soon] does include a good mix of ETFs and stocks instead of just stocks.